MBG Markets: The charm of cross currency

A true trader's radar antenna is always on, like a hunting dog searching for opportunities and information everywhere, because they know that opportunities will not come knocking on their door and need to find them on their own. If you really know how to playforeign exchangeSo you should know that its essence is speculative buying and selling. The only difference between investment and speculation is who can predict the occurrence of a "trend" with a high probability. That is to say, as long as you know how to predict future price trends, then for you, all roads lead to Rome. What currency pairs can you trade for profit?
Mainstream market
We all know that the "dollar" isForeign exchange transactionsThe importance of the market is due to the dominant position of the United States in the global economy. It should be noted that 80% of foreign exchange transactions in the world include the US dollar, which is also because the US dollar is a global reserve currency.
You may wonder why euros or pounds are not? Because the vast majority of agricultural and industrial commodities such as oil are priced in US dollars. If a country wants to purchase other agricultural products or oil, it needs to convert its currency into US dollars before purchasing related products. This is also why the vast majority of countries use US dollars as their foreign exchange reserves, which can make it more convenient for them to purchase other foreign goods. Countries like China, Japan, and Australia are major oil importers, and at this point, they need to reserve more US dollars in their central banks. For China, however, reserves are limited3Trillion dollars in inventory!
Given that the US dollar dominates the global monetary system, the vast majority of speculative transactions in the currency trading world are based on a single point: "Will the US dollar strengthen or weaken today?".
So, we can see the following major currency pairs: GBP/USD（GBP/USD）Euro/USD（EUR/USD）USD/Swiss franc（USD/CHF）USD/Japanese yen（USD/JPY）; There is also a commodity currency pair: Australian dollar/USD（AUD/USD）USD/Canadian dollars（USD/CAD）New Zealand dollars/USD（NZD/USD）. These currency pairs all include the US dollar, and the trend of the US dollar affects the vast majority of the most liquid currency pairs.
As can be seen from the following figure, if you choose to trade7If there are major currency pairs, then you will fall into a "dollar" curse, constantly keeping a close eye on the trend of the US dollar from the beginning of your bed. Your stance is basically bearish or bullish on the US dollar, and speculation on a single variety of the US dollar will lead to7Major currency pairs usually experience a situation of both falling and rising.



Minority
Can we truly "avoid" the impact of the US dollar on us?MBG MarketsI don't think so, because even when calculating the cross exchange rate of cross currency pairs, we still need to first find two sets of currency pairs containing US dollars before calculating. So why do we need to trade cross currency pairs? The reason is that cross currency pairs can give us more trading options.
You can see the following chart, although the overall stock market trend is positive, not all companiesstock market indexAll are rising. This means that you still have many different trading opportunities, and the entire stock market will not affect our speculation on a single variety.





Do you now know the reason for trading cross currency pairs? Because these currency pairs are not directly linked to the US dollar, different trend characteristics may occur. Therefore, although market sentiment is always bullish or bearish on the US dollar, you can always find new trading opportunities on cross currency pairs. For example, all direct trading of the US dollar may maintain a sideways consolidation trend at certain times. At this time, it is best for speculative trading of the US dollar to leave the market and wait for new trading opportunities. However, if you learn to turn your attention to the cross market, you will have more trading opportunities than other traders!
For example, if there is a large charity store that offers delicious bread for free on Mondays, Wednesdays, Fridays, or other days, homeless people can queue up to receive it; But what about Tuesday, Thursday, and Saturday? Some vagrants will feel free from hunger for a day, but some vagrants will feel that it is impossible to continue like this for a long time, so they began to look for a charity shop nearby. Finally, they found a charity shop that also opened on Tuesday, Thursday and Saturday. Although it is just plain Congee, it at least ensures that there is something to eat when the bread charity shop is not open! All of these fully demonstrate that you need to learn to be dissatisfied. Only by not being satisfied with the current situation can you realize the problem and break through the encirclement. When the vast majority of people stay in the mainstream market, you can realize the benefits of the minority, whether in terms of trading or filling their stomachs, it is actually creating more opportunities for yourself.